Logo
Munich Personal RePEc Archive

Is public debt harmful towards economic growth? New evidence from South Africa

Mhlaba, Ncebakazi and Phiri, Andrew (2017): Is public debt harmful towards economic growth? New evidence from South Africa.

[thumbnail of MPRA_paper_83157.pdf]
Preview
PDF
MPRA_paper_83157.pdf

Download (7MB) | Preview

Abstract

The issue of whether public debt is useful or harmful towards economic growth is one of the most prevailing debates in the literature with no consensus existing on the subject matter. The study employs the ARDL model to examine the long-run and short-run effects of public debt on economic growth for South African data spanning a period between 2002:q2 to 2016:q4. Our sensitivity analysis consists of re-estimating our empirical regressions using two sub-samples dataset corresponding to the pre-crisis period (i.e. 2002:q1 to 2007:q2) and the post-crisis period (i.e. 2007:q3 to 2016:q4). All estimated regressions unanimously find negative long-run debt –growth relationship although the short-term effects are unclear with some evidence of a positive short-run relationship between the time series specifically in the post-crisis period. Overall, our empirical results have some useful ramifications towards policymakers.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.